Berlusconi has video ready for fall of Italian government -ally

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People of Liberty party (PDL) leader Silvio Berlusconi poses as he signs a referendum …

By Sara Rossi and Francesca Piscioneri

MILAN (Reuters) - Silvio Berlusconi has prepared a video message that could announce a decision to bring down Italian Prime Minister Enrico Letta's coalition government, one of his staunchest supporters said on Thursday.

As talk mounted of an imminent crisis, President Giorgio Napolitano, who appointed Letta in April, warned of the "serious risks" the government's fall would bring to Italy.

The announcement of the video came ahead of a meeting on Monday of a special Senate committee that will vote on whether to strip centre-right leader and former premier Berlusconi of his seat in parliament after he received a four-year jail sentence for tax fraud.

"It's ready, Berlusconi will decide when to broadcast it and I think it is absolutely imminent," Daniela Santanche, a deputy nicknamed "the pythoness" for her fierce devotion to the media billionaire, told a news conference.

She said the 76-year-old Berlusconi alone would decide whether to quit the government but that statements from his centre-left coalition partners in support of expelling him from the Senate were unacceptable.

"Personally, I don't think we can remain sitting next to people who want to be the butchers of Berlusconi."

Napolitano remained confident Berlusconi would stick to previous pledges to back Letta, considering that "a government crisis would expose the country to extremely serious risks," a source in Napolitano's office told reporters.

Speculation over a crisis that could topple the fragile coalition of the centre-left Democratic Party (PD) and the centre-right People of Freedom (PDL) party has been swirling ever since Berlusconi lost his final appeal against the conviction last month.

The trigger could be a Senate committee on parliamentary eligibility which meets on Monday to begin discussions that could end with the formal opening of procedures to expel Berlusconi from the Senate.

However the PDL itself appears divided and has switched between pledges of support for Letta and repeated threats over the last few weeks to bring down the government, adding to the sense of confusion hanging over the political world in Rome.

Italy can ill-afford disarray: the euro zone's third largest economy is struggling to emerge from its longest post-war recession and cut its massive public debt, but reform efforts have been hampered by constant infighting within the government.

"There is something irrational in the behaviour of Silvio Berlusconi at the moment, which can only be explained by a state of great personal torment," the Corriere della Sera, Italy's biggest daily, said in a front-page editorial.

COMPLICATIONS

Speaking at a meeting of the G20 group of economic powers in St Petersburg, Letta brushed off questions about the future of the government, saying he was not thinking about a possible crisis but rather concentrating on the summit.

But the uncertainty has reawakened memories of the turmoil that scuttled Berlusconi's last government at the height of the euro zone debt crisis in 2011. Financial markets have been increasingly twitchy as threats to stability have grown.

The centre-right says the law under which Berlusconi could be expelled from parliament is unconstitutional and should not apply to the former premier as it was passed after the events over which he was convicted.

The PD in turn has accused the centre-right of using "blackmail" to try to save Berlusconi and says it will vote to strip him of his seat.

There has been speculation that rebels from the centre-right or the anti-establishment 5-Star Movement may provide alternative parliamentary support for Letta, who was named prime minister after weeks of wrangling in the wake of a deadlocked February election which left no party able to govern alone.

Reluctance to consider a new vote has also been increased by fears that the current, much-criticised electoral law, which is being reviewed by the constitutional court and could soon be overturned, would only produce another stalemate. (Writing by James Mackenzie; Editing by Barry Moody and Mark Heinrich)